Tag Archives: San Francisco Bay Chapter of the Sierra Club

Reuters Exclusive: California getting more Bakken crude by barge than rail

Repost from Reuters
[Editor:  At the 9/11/14 Benicia Planning Commission meeting, John Hill, vice president and general manager of the Valero Benicia Refinery, stated that Bakken crude has been refined at Valero.  Commissioner Steve Young asked Hill to confirm his statement, which he did.  Young then asked the means of transport, and Hill replied “by barge.”  Our communities might well ask when, how much, and with what new volatile emissions output, etc….  – RS]

Exclusive: California getting more Bakken crude by barge than rail

By Rory Carroll, SAN FRANCISCO, Oct 23, 2014
A pumpjack brings oil to the surface  in the Monterey Shale, California, April 29, 2013.  REUTERS/Lucy Nicholson
A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. REUTERS/Lucy Nicholson

(Reuters) – Shipments of Bakken crude oil from North Dakota to California by barge have quietly overtaken those by train for the first time, showing how the state’s isolated refiners are using any means necessary to tap into the nation’s shale oil boom.

While tough permitting rules and growing resistance by environmentalists have slowed efforts to build new rail terminals within California itself, a little-known barge port in Oregon has been steadily ramping up shipments to the state, a flow expected to accelerate next year.

From January through June, California received 940,500 barrels of the North Dakota crude oil from barges loaded at terminals in the Pacific Northwest, the highest rate ever, Gordon Schrempf, senior fuels analyst for the California Energy Commission, told Reuters.

Bakken crude transported to California on railcars, which has gained widespread attention after a series of fiery train derailments in North America, accounted for just 702,135 barrels over the same time period, according to published figures.

“We’re seeing marine transport of Bakken crude outpace rail for the first time,” Schrempf said. In 2013, rail shipments of 1.35 million barrels exceeded barge shipments of 1.33 million barrels. The year before, almost no crude arrived by barge.

Bakken shipments by barge and rail may only comprise a tiny portion of the crude California imports, at about 5,200 and 4,000 barrels per day respectively, with Alaska supplying over 20 times as much crude.

But companies, including refiner Tesoro Corp and logistics company NuStar Energy LP, have plans to significantly expand that volume with new terminals along the Pacific Northwest that would unload trains from North Dakota and pump the oil onto tankers.

They would help make California a major destination for Bakken oil, a trend that has drawn objections from environmental groups who have been seeking to stem the tide, often by blocking local permits to built oil-train offloading terminals.

“Bringing it in by barge gets you around cumbersome permitting and the growing citizen opposition to crude-by-rail,” said Lorne Stockman, research director of Oil Change International, a research and advocacy organization working on energy, climate and environmental issues.

To be sure, their objections may differ. The principle concern over transporting Bakken by rail is the risk that a derailment could cause a deadly explosion similar to the one in Lac Megantic, Quebec, last year that killed 47 people.

There is no suggestion that waterborne oil transportation poses similar explosive risks, although the environmental impact of a barge spill could be much greater.

“The barges are designed to carry the grade of oil that the Bakken is,” said Ted Mar, prevention branch chief for the state’s Office of Spill Prevention and Response and a former member of the Coast Guard.

That is small comfort to environmentalists, who oppose all forms of oil production, in particular shale crudes like Bakken, extracted through hydraulic fracking they fear contributes to global warming and poses a potential risk to water supplies.

“Our end goal is to leave these more dangerous, unconventional fuels in the ground,” said Jess Dervin-Ackerman, conservation manager for the San Francisco Bay Chapter of the Sierra Club.

SMALLER BUT CLOSER

With state production declining since the mid-80s, California’s refiners have increasingly relied on deliveries of crude by oceangoing tankers carrying 500,000 barrels or more from places like Alaska, Saudi Arabia, Ecuador and Iraq, which supplied two-thirds of their needs last year.

The refiners have been scrambling for several years to get better access to cheaper domestic shale oil by any means necessary, replacing costlier imports. But with the big shale fields to the east of the Rocky Mountains and a lack of major pipelines, it has not been easy.

The articulated tug barges (ATBs) now arriving are tiny by comparison to the tankers, carrying as little as 50,000 barrels.

Such shipments cost more than bringing Bakken directly to California by rail, but easily plug into existing port and terminal infrastructure – avoiding the need for new permitting that can take years.

While many are working to build out their own rail facilities, a handful of major rail-to-barge terminals along the Pacific Northwest coast that would ship over 500,000 bpd of Bakken crude have been in the works for several years. But most are incomplete, and several face delays.

One of the few exceptions is an idled ethanol terminal and processing plant in Clatskanie, Oregon, run by Global Partners LP. The facility, on a small canal that feeds into the Columbia River, began quietly transshipping oil from trains to barges in 2012 and is now receiving so-called “unit trains”, mile-long trains that only carry crude oil.

“Unit train volume into our Clatskanie terminal is up, and interest in the facility from prospective customers is at an all-time high,” Global Partners Chief Executive Eric Slifka said in August.

Global Partners did not respond to a request for comment.

Later that month, the firm received a new air permit from the Oregon Department of Environmental Quality that will allow it to ship as much as 1.84 billion gallons of volatile liquids, or some 120,000 bpd. It did not specify crude or ethanol.

Much of those shipments moved north to refineries in Washington, including BP’s Cherry Point in Puget Sound, and Phillips 66’s Ferndale facility. But both those plants are expanding their own facilities to bring more Bakken in by rail, likely curbing some demand for barges.

Top oil barge operator Kirby Corp, which runs vessels out of Clatskanie, is currently building two larger 185,000-barrel barges to deploy on the coast next autumn.

Environmentalists say they are monitoring the rise in Bakken-by-barge deliveries.

“This won’t pull our focus away from crude by rail, but rather expand the lens with which we look at dangers of Bakken entering our communities,” said the Sierra Club’s Dervin-Ackerman.

(Reporting by Rory Carroll, editing by Jonathan Leff and Marguerita Choy)
Share...

    Oakland City Council votes to oppose coal, crude oil trains

    Repost from Reuters
    [Editor: See also “Oakland City Council Votes to Divest from Fossil Fuel Companies”  – RS]

    Oakland City Council votes to oppose coal, crude oil trains

    By Rory Carroll, San Francisco, June 18, 2014

    (Reuters) – The Oakland City Council has unanimously backed a resolution opposing the use of the city’s rail lines to transport crude oil and coal, a move that supporters hope will call attention to proposed projects that would sharply increase the amount of such cargo rolling through the densely populated city.

    The resolution will not halt crude oil trains from entering Oakland since U.S. railroads are federally regulated, but backers hope it will stoke debate about plans for export facilities that would boost demand.

    Backers of the resolution are particularly concerned about a proposed upgrade to Phillips 66’s Santa Maria refinery that would allow it to take in more crude oil from North Dakota on trains that would pass by rail through Oakland.

    They are also worried about the redevelopment of the Oakland Army Base, which includes the building of a commodities facility that they believe will be used to export coal. The coal would also be moved through the city by rail.

    “These proposed export facilities are a serious threat to Oakland and the East Bay communities,” said Jess Dervin-Ackerman of the San Francisco Bay Chapter of the Sierra Club.

    “If oil and coal companies have their way, the Bay Area will become the biggest fossil fuel export hub on the West Coast,” she said.

    The fuels will not be consumed in the Bay Area, she added, but would just pass through the area on their way to overseas markets.

    California has in recent years seen a surge in crude oil arriving by rail on the back of an oil boom in North Dakota’s Bakken shale formation and in Canada, prompting safety and environmental concerns.

    Crude oil-by-rail shipments into California increased from about 70 rail tanker carloads in 2009 to nearly 9,500 carloads in 2013, according to state regulators. They are projected to soar in the next few years.

    Last July, 47 people were killed in Lac-Megantic, Quebec, when a freight train carrying Bakken crude oil derailed and exploded. Since then, there have been a number of fiery derailments in the United States that have caused environmental damage, but no fatalities.

    Separately, the Oakland City Council on Tuesday night unanimously passed a resolution to divest money from city employees from fossil fuel companies, although none of that money is currently invested in those types of businesses.

    The move is intended to put pressure on the California Public Employees Retirement System (CalPERS), which does hold such investments, to follow suit.

    CalPERS is one of the country’s largest managers of public pensions, with $288 billion in retiree assets under management. (Reporting by Rory Carroll, editing by G Crosse)

    Share...